Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 6 stocks made the list for top value stocks in the Metals & Mining - Iron & Steel industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Latest Metals & Mining - Iron & Steel Stock News

Before choosing which top Metals & Mining - Iron & Steel stock to buy, be sure to conduct proper due diligence: analyze various financial metrics and look at historical data, public statements and news coverage.

The iron & steel industry was negatively impacted by pandemic-related economic shutdowns, supply chain disruptions and freezes in consumption. However, the industry has experienced a swift recovery in domestic steel demand, and steel prices were at multi-year highs at the start of 2021. As of April 28, 2021, steel prices were up 57% from the beginning of the year and up 156% compared to the full-year average price in 2020. Despite the increase in profitability for steel producers as a result, the higher prices may not be sustainable given significant excess capacity. 

Why Focus on Undervalued Metals & Mining - Iron & Steel Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

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6 Undervalued Metals & Mining - Iron & Steel Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 6 undervalued stocks in the Metals & Mining - Iron & Steel industry for Thursday, November 23, 2023. Let’s take a closer look at their individual scores to see how they measure up against each other and the Metals & Mining - Iron & Steel industry median.

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

Cleveland-Cliffs Inc’s Value Grade

Value Grade:

Cleveland-Cliffs Inc. is a flat-rolled steel producer in North America. The Company is engaged in manufacturing iron ore pellets. It is vertically integrated from mined raw materials, direct reduced iron and ferrous scrap to primary steelmaking and downstream finishing, stamping, tooling, and tubing. It offers advanced high-strength steels (AHSS), hot-dipped galvanized, aluminized, galvalume, electrogalvanized, galvanneal, hot-rolled coil (HRC), cold-rolled coil, plate, tinplate, grain oriented electrical steel (GOES), non-oriented electrical steel (NOES), stainless steels, tool and die, stamped components, rail, slab and cast ingot. It provides steel solutions, such as operations of tooling and stamping, which provides advanced-engineered solutions, tool design and build, hot and cold-stamped components, and complex assemblies for the automotive market. It serves various markets, such as automotive, infrastructure and manufacturing, steel producers, and distributors and converters.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Cleveland-Cliffs Inc has a Value Score of 75, which is considered to be undervalued.

When you look at Cleveland-Cliffs Inc’s price-to-sales ratio at 0.39 compared to the industry median at 0.56, this company has a lower price relative to revenue compared to its peers. This could make Cleveland-Cliffs Inc’s stock more attractive for value investors.

Cleveland-Cliffs Inc’s price-earnings ratio is 25.43 compared to the industry median at 11.33. This means it has a higher share price relative to earnings compared to its peers. This could make Cleveland-Cliffs Inc less attractive for value investors.

Now, let’s assess Cleveland-Cliffs Inc’s EV/EBITDA ratio, also known as enterprise multiple. At 7.3, when compared to the industry median of 6.6, the company may be considered overvalued in relation to its peers. Value investors could use the enterprise multiple to identify stocks that are considered overvalued or undervalued relative to their industry.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. Cleveland-Cliffs Inc’s shareholder yield is lower than its industry median ratio of 3.26%. Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. Cleveland-Cliffs Inc’s price-to-book ratio is lower than its industry median ratio of 1.14. This could make Cleveland-Cliffs Inc more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Cleveland-Cliffs Inc’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Cleveland-Cliffs Inc’s price-to-free-cash-flow ratio is lower than its industry median ratio of 8.18. This could make Cleveland-Cliffs Inc more attractive because the lower P/FCF ratio indicates that Cleveland-Cliffs Inc is undervalued. The P/FCF ratio metric can also be viewed over a long-term time frame to see if the company's cash flow to share price value is generally improving or worsening.

Friedman Industries Inc’s Value Grade

Value Grade:

Friedman Industries, Incorporated is a manufacturer and processor of steel products. Its segments include coil products and tubular products. The coil products segment consists of the operation of five hot-rolled coil processing facilities located in Hickman, Arkansas; Decatur, Alabama; East Chicago, Indiana; Granite City, Illinois and Sinton, Texas. The Hickman, East Chicago and Granite City facilities operate temper mills and corrective leveling cut-to length lines. The Sinton and Decatur facilities operate stretcher leveler cut-to-length lines. The tubular products segment consists of the operations in Lone Star where the Company manufactures electric resistance welded pipe and distributes pipe through its Texas Tubular Products division (TTP). TTP operates two electric resistance welded pipe mills with a combined outside diameter (OD) size range of 2 3/8 OD to 8 5/8 OD. Both pipe mills manufacture line pipe and oil country pipe and also manufacture pipe for structural purposes.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Friedman Industries Inc has a Value Score of 94, which is considered to be undervalued.

Friedman Industries Inc’s price-earnings ratio is 4.8 compared to the industry median at 11.3. This means that it has a lower price relative to its earnings compared to its peers. This makes Friedman Industries Inc more attractive for value investors.

Friedman Industries Inc’s price-to-book ratio is higher than its peers. This could make Friedman Industries Inc less attractive for value investors when compared to the industry median at 1.14.

You can read more about Friedman Industries Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

ArcelorMittal SA (ADR)’s Value Grade

Value Grade:

ArcelorMittal SA is a Luxembourg-based holding company. The Company, via its subsidiaries, owns and operates steel, iron ore manufacturing and coal mining facilities in Europe, North and South America, Asia, and Africa. The Company is organized in five operating segments: NAFTA; Brazil; Europe; Africa and Commonwealth of Independent States (ACIS), and Mining. The NAFTA, Brazil, Europe, and ACIS segments produce flat, long, and tubular products including slabs, hot-rolled coil, cold-rolled coil, coated steel products, among others. The Mining segment provides steel operations and comprises all mines owned by the Company in the Americas, Europe, Africa, and countries of the Commonwealth of Independent States (CIS).

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

ArcelorMittal SA (ADR) has a Value Score of 99, which is considered to be undervalued.

ArcelorMittal SA (ADR)’s price-earnings ratio is 5.0 compared to the industry median at 11.3. This means that it has a lower price relative to its earnings compared to its peers. This makes ArcelorMittal SA (ADR) more attractive for value investors.

ArcelorMittal SA (ADR)’s price-to-book ratio is higher than its peers. This could make ArcelorMittal SA (ADR) less attractive for value investors when compared to the industry median at 1.14.

You can read more about ArcelorMittal SA (ADR)’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

SIFCO Industries Inc’s Value Grade

Value Grade:

SIFCO Industries, Inc. is engaged in the production of forgings and machined components primarily for the aerospace and energy markets. The processes and services include forging, heat-treating, coating and machining. The Company produces forged components for turbine engines for commercial, business and regional aircraft as well as military aircraft and armored military vehicles; airframe applications for a variety of aircraft; industrial gas and steam turbine engines for power generation units, and other commercial applications. The Company services both original equipment manufacturers (OEM) and aftermarket customers with products that range in size from approximately 2 to 1,200 pounds. The Company's products are distributed in the United States as well as non-United States markets. The Company's manufacturing facilities are located in Cleveland, Ohio (Cleveland); Orange, California (Orange), and Maniago, Italy (Maniago).

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

SIFCO Industries Inc has a Value Score of 85, which is considered to be undervalued.

SIFCO Industries Inc’s price-to-book ratio is higher than its peers. This could make SIFCO Industries Inc less attractive for value investors when compared to the industry median at 1.14.

You can read more about SIFCO Industries Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

SunCoke Energy Inc’s Value Grade

Value Grade:

SunCoke Energy, Inc. is an independent producer of coke. The Company operates through three segments: Domestic Coke, Brazil Coke, and Logistics. The Domestic Coke segment consists of cokemaking facilities and heat recovery operations at Jewell, Indiana Harbor, Haverhill, Granite City, and Middletown plants. Its Brazil segment consists of cokemaking operations located in Vitoria, Brazil, where it operates the ArcelorMittal Brazil cokemaking facility for a Brazilian subsidiary of ArcelorMittal S.A. The Logistics segment consists of Convent Marine Terminal (CMT), Kanawha River Terminal (KRT), Lake Terminal and Dismal River Terminal (DRT). CMT provides loading and unloading services located in Convent, Louisiana. The facility serves coal mining customers as well as other merchant business, including aggregates (crushed stone), petroleum coke and iron ore. KRT is a metallurgical and thermal coal mixing and handling terminal service provider that operates in Ceredo and Belle, West Virginia.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

SunCoke Energy Inc has a Value Score of 89, which is considered to be undervalued.

SunCoke Energy Inc’s price-earnings ratio is 13.8 compared to the industry median at 11.3. This means that it has a higher price relative to its earnings compared to its peers. This makes SunCoke Energy Inc less attractive for value investors.

SunCoke Energy Inc’s price-to-book ratio is lower than its peers. This could make SunCoke Energy Inc more attractive for value investors when compared to the industry median at 1.14.

You can read more about SunCoke Energy Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

United States Steel Corporation’s Value Grade

Value Grade:

United States Steel Corporation (U.S Steel) is an integrated steel producer, which is engaged in producing and selling steel products, including flat-rolled and tubular products, in North America and Europe. The Company?s operations in the United States also include iron ore and coke production facilities and real estate operations. Its operations in Europe also include coke production facilities. The Company operates through four segments: North American Flat-Rolled (Flat-Rolled), Mini Mill, U. S. Steel Europe (USSE) and Tubular Products (Tubular). Its Flat-Rolled segment is engaged in the production of slabs, strip mill plates, sheets and tin mill products, as well as all iron ore and coke production facilities in the United States. The Mini Mill segment produces hot-rolled, cold-rolled and coated sheets and electrical steels. The USSE segment includes U. S. Steel Kosice (USSK), U. S. Steels integrated steel plant and coke production facilities in Slovakia, and its subsidiaries.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

United States Steel Corporation has a Value Score of 97, which is considered to be undervalued.

United States Steel Corporation’s price-earnings ratio is 7.7 compared to the industry median at 11.3. This means that it has a lower price relative to its earnings compared to its peers. This makes United States Steel Corporation more attractive for value investors.

United States Steel Corporation’s price-to-book ratio is higher than its peers. This could make United States Steel Corporation less attractive for value investors when compared to the industry median at 1.14.

You can read more about United States Steel Corporation’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Other Metals & Mining - Iron & Steel Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Metals & Mining - Iron & Steel stocks as well as other industrys.

Choosing Which of the 6 Best Metals & Mining - Iron & Steel Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

• Cleveland-Cliffs Inc stock has a Value Grade of B.
• Friedman Industries Inc stock has a Value Grade of A.
• ArcelorMittal SA (ADR) stock has a Value Grade of A.
• SIFCO Industries Inc stock has a Value Grade of A.
• SunCoke Energy Inc stock has a Value Grade of A.
• United States Steel Corporation stock has a Value Grade of A.

Now that you have a bit more background about each of the 6 undervalued stocks in the Metals & Mining - Iron & Steel industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

Additional Resources About Metals & Mining - Iron & Steel Stocks

Want to learn more about Metals & Mining - Iron & Steel stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

• 6 Undervalued Metals & Mining - Iron & Steel Stocks for Thursday, November 23
• 7 Undervalued Metals & Mining - Iron & Steel Stocks for Wednesday, November 22
• Why Ramaco Resources Inc’s (METC) Stock Is Up 4.98%
• Why Vale SA (ADR)’s (VALE) Stock Is Down 4.16%

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